ATO brings 'worst kind of tax cheats' to justice

The ATO, along with the Commonwealth director of public prosecutions (DPP), has highlighted recent prison terms imposed on a number of individuals to warn tax offenders that the courts view tax crime very seriously.

The tax office, with the DPP, has released a statement detailing some of the recent efforts to catch and prosecute some of the country’s worst tax offenders in an attempt to deter others from committing similar crimes.

The ATO highlighted the recent case of John Wayne Massey in which Mr Massey received three and a half years' imprisonment after being found guilty of obtaining a financial advantage by deception and two years' imprisonment in relation to attempting to obtain a financial advantage by deception.

Mr Massey was found to have lodged 25 business activity statements (BASs) with the ATO over a period of six months, receiving a total of $141,048.22 in refunds while attempting to obtain an additional $257,655.45 in refunds.

The court found Mr Massey had sole control of seven companies, which never traded, and used two different tax agents to lodge the false BASs on behalf of these companies.

The ATO warned that the courts view tax crime seriously and, as evidenced by a number of recent cases, will impose lengthy jail sentences for the worst offenders.

According to the statement, sentences handed down this year have included an eight-year term of imprisonment (with five years to serve) for a man who falsely claimed significant diesel fuel rebates.

“These people are the worst kind of tax cheats,” said ATO deputy commissioner Michael Cranston.

“They were calculated in their attempts to deliberately commit fraud and evade their tax obligations, ultimately stealing from the Australian public, and placing an unfair burden on others who are doing the right thing,” he added.

Mr Cranston said the ATO, Australian Federal Police, the Australian Crime Commission and the DPP work closely together, along with other relevant agencies, as part of a whole-of-government approach to address tax crime and ensure serious offenders are caught and face the full force of the law.

“We have sophisticated systems in place to detect and catch those who do the wrong thing. Our current focus for prosecution referrals is on wealthy individuals who engage in serious evasion, as well as promoters and facilitators of tax fraud, including those in positions of trust such as accountants and lawyers,” Mr Cranston said.

Deputy Commonwealth DPP James Carter said that as an independent prosecution service, the DPP works with partner agencies to advance their goals and priorities through prosecution in accordance with the orosecution Policy of the Commonwealth.

The ATO said that as of March 2015, it has prosecuted 692 individuals and 212 companies for failing to lodge returns or keep records, for making false and misleading statements or for not responding to ATO questions when required to do so.

Fines, costs and reparation orders totalling more than $7.3 million have been imposed.